VICE MINISTER FIRED FOR U.S. IV VISIT

C O N F I D E N T I A L LA PAZ 000247

SIPDIS

E.O. 12958: DECL: 02/12/2019
TAGS: PGOV PREL PINR OEXC KDEM BL
SUBJECT: VICE MINISTER FIRED FOR U.S. IV VISIT

REF: 08 LA PAZ 1023

Classified By: A/EcoPol Chief Brian Quigley for reasons 1.4 (b)(d)


1. (C) Summary: Vice Minister for Basic Services Gustavo
Morales was fired last month for participating in a
USG-sponsored International Visitor program. VM Morales said
his former boss Minister of Water Rene Orellana and Minister
of Government Juan Ramon Quintana approached President Evo
Morales shortly after he departed on the January
International Visitor (IV) trip to accuse VM Morales of using
the trip to receive instructions to spy on the Bolivian
government. This is not the first sign of GOB suspicions of
our IV and other PAS programs, making potential MAS-aligned
candidates leery to participate. End Summary.

Quintana and Orellana: Vice Minister is "Goldberg's Spy"
-------------- --------------


2. (C) While participating in a U.S. International Visitor
(IV) program January 10-30 ("Transition to a New
Administration"),Vice Minister (VM) for Basic Services
Gustavo Morales (strictly protect) learned his position had
ceased to exist. Upon returning from the program, VM Morales
confronted Minister of Water Rene Orellana, his old boss, to
determine if the change was part of a ministry
re-organization or politically motivated. Orellana told him
he was fired for "going to United States at the express
invitation of (former U.S. Ambassador to Bolivia Philip)
Goldberg." Orellana alleged that VM Morales was being
recruited to spy for the United States, that Ambassador
Goldberg was working behind the scenes with the incoming
Obama Administration to organize a revamped spy network in
Bolivia, and that the IV program was a front for VM Morales
to "receive his orders."


3. (C) On February 8, President Evo Morales' secretary called
VM Morales to ask him to accompany President Morales at a
Santa Cruz event regarding the history of the MAS party and
arrange a separate, later meeting with him at the
Presidential Palace. The secretary confided to VM Morales
that shortly after he left on the IV trip, Orellana had
accused him of spying to President Morales. President
Morales allegedly did not believe him and asked for "proof"
(Note: the Vice Minister and the President have a friendship
dating back to mid-1990s MAS organization. End Note.)
Orellana returned days later with Presidency Minister Juan
Ramon Quintana, who brought the IV program invitation letter
with him as supposed "proof."

With Friends Like the MAS...
--------------


4. (C) VM Morales strongly suspects Quintana obtained the IV
invitation letter from Foreign Minister David Choquehuanca.
VM Morales had asked Choquehuanca if he was comfortable with
the trip initially during the Spring of 2008, again in person
(December 30) and finally via telephone (January 9). In all
cases, Choquehuanca had agreed the visit seemed innocuous and
approved it. After the IV visit, Choquehuanca has not
returned VM Morales' e-mails or phone calls despite their
long friendship. VM Morales said he felt betrayed by
Choquehuanca, particularly considering VM Morales had often
fought for him in the past. Most significantly, VM Morales
claimed he helped Choquehuanca obtain a four-month position
to the board of directors for IPSAS, the El Alto water
company, which netted Choquehuanca about $1.5 million in
kickbacks.


5. (C) VM Morales said the experience revealed to him how
"low these people really are." He claimed he would explain
to President Morales the truth of the situation, but would
neither "beg forgiveness" nor "try to get back in with these
people. ... I have no desire to work with these scheming
pigs anymore."

IV Trip was Last Straw
--------------


6. (C) VM Morales said although the IV trip was the catalyst
for his dismissal, there were clear signs previously that
Orellana wanted to get rid of him. VM Morales said Orellana
was angry that Morales was making his other two Vice
Ministers, Orellana cronies, look bad. VM Morales said his
Vice Ministry was spending 95 percent of its monthly budget
by December, while the rate was 9.5 percent in July, when he
took over. By comparison the other Vice Ministers were able
to spend 37 and 52 percent of their budgets. VM Morales was
disappointed that Orellana rejected out of hand his ideas to
improve the ministry's efficiency and limit corruption, he
suspects at least partially to protect his own sources of
graft. VM Morales claimed Orellana had practically "begged"
him to take the VM position, promising to make Morales his
successor after becoming Minister of the Environment (which
he did officially February 8).


7. (C) By December, Orellana stopped meeting with VM Morales
privately, canceled his official cellular phone account, and
denied him use of the ministry's motor pool. VM Morales said
he further incurred Orellana's wrath by writing a report
critical of the ministry's organization, particularly
pointing out how to fix potential vulnerabilities to
corruption. He attempted to send the report to President
Morales directly in December, but it was intercepted by
Quintana and revealed to Orellana. Although he eventually
got the report into President Morales' hands "using other
contacts," the damage was done with Orellana. He expected
some kind of reprisal, but not to be fired. "I learned in
this government, you are punished for either being very
productive or a complete failure. Only mediocrity is
rewarded."

Trip was "Worth It"
--------------


8. (C) Ultimately, VM Morales said he has no regrets: "I knew
what I was getting into." VM Morales told PolOff in December
that he suspected the trip "would put me in a bad situation,"
but that he expected the worst that would happen is "Evo
would yell at me a bit." VM Morales said the trip "was worth
the punishment" and encouraged the Embassy to continue
nominating "people that are for change," but cautioned that
ideally candidates "should have a strong independent
political base" to protect them from spurious charges. He
conceded most GOB supporters did not meet this prerequisite.

Still a True Believer
--------------


9. (C) Despite the high professional cost of the trip, VM
Morales remains a true believer in the MAS' "change agenda."
He said he may have lost confidence in "certain MAS leaders,
but they only exposed that they are not really the MAS." I
have not changed my dedication to the MAS principals, they
(Quintana, Orellana, and Choquehuanca) have." After handing
out a suitcase full of pocket MAS constitutions during his
trip, VM Morales is especially bitter that "while I was
working to defend this government in the United States, they
were working to destroy me in Bolivia."

Suspicious Minds: Past Harassment of PAS Programs
-------------- ---


10. (C) Unfortunately, VM Morales is not the first casualty
of MAS paranoia regarding our PAS programs. CSUTCB
(Agricultural Union) President Rufo Calle was roundly
criticized last year for selling out to the "empire" by
participating in an IV program. Since late 2007, the
Ministry of Finance has repeatedly demanded we provide the
names, ID numbers, addresses, and program agendas of our IV
and scholarship participants to the GOB. President Morales
also accused our Peace Corps and Fulbright scholars of being
spies and the GOB stopped providing long-term courtesy visas
for all PAS program participants in 2008 (reftel). Contacts
in the Ministry of Finance confirm that the GOB is not
requesting this information for program participants
sponsored by other countries.

Comment:
--------------


11. (C) MAS moderates are understandably increasingly
skittish about engaging with us. The IV scrutiny is only
part of a larger government penchant for suspecting anyone
associated with the Embassy or any of our programs of being
nefariously under our control. Quintana seems an odd choice
for accuser-in-chief, given his military training experiences
at the School of the Americas. Never-the-less, as far back
as August 2007, Minister Quintana warned that "traitors"
working with the United States would be "judged" by history
(reftel). End Comment.
URS